Singapore cuts 2015 growth forecast to 2 percent

It was also up 1.9 percent quarter-on-quarter, reversing a contraction in the previous three months and allowing the economy to escape a technical recession.

“Taking these factors into consideration, MTI expects the Singapore economy to grow by close to 2.0 per cent for the whole of 2015”, it said.

Frances Tan, an economist at UOB Bank, said the sharp upward revision in the third quarter did not change the outlook for modest growth.

One of the downside risks for 2016 is if China’s economic rebalancing will falter.

An uneven and sluggish global recovery has weighed on Singapore’s manufacturing sector, which has been a drag on growth this year.

Singapore’s monetary policy remains appropriate and the Government’s revised growth forecast is within the scope of the the central bank’s October policy decision, a senior Monetary Authority of Singapore (MAS) official said on Wednesday (Nov 25).

Trade promotion agency IE Singapore today revised their non-oil domestic exports (NODX) forecast for the year for the second time this year, due to a weaker growth in the third quarter.

As for the growth in 2016, the ministry expected the economy to grow at a modest pace of “1 percent to 3 percent”.

Singapore, a city-state at the tip of peninsula Malaysia, is the wealthiest economy in Southeast Asia but has shifted to lower growth rates in the past decade as other countries including China eroded its traditional strengths in electronics and other manufacturing.

That would make growth lower than last year’s 2.9 per cent and the weakest since 2009, when Singapore’s economy was hit by the global financial crisis and contracted 0.6 per cent.